Today I am going to examine how the exit of Great Britain can create an excellent opportunity for you to cash in big time, but first we must research how this could affect the Euro, Great British Pound, and the American Dollar, as well as other currencies.
The wonderful thing about trading Forex is that you can make money whether a currency rises or falls. The trick is to be on the winning side of that movement.
In order to do that, we must first take a look at the history on the European Union, so we can better understand the consequences of this separation.
What is the European Union (EU)?
The history and politics of the European Union is pretty complex, so I am going to try to make this as simple as possible. In a nutshell, the European Union is a collective of 28 separate countries within the European continent.
It is a massive political and economic system that was created after WWII in 1958. The initial founding of the EU was called the European Economic Community (EEC), and it was designed to bring the nations of Europe together creating a single market.
With the name changed to the European Union in 1993, it is also referred to as the EC or European Community with the main purpose of bringing of bringing the nations together for economic growth through the single market model.
What is Brexit?
I thought I would include this term in this “Should Britain Leave the EU/Brexit?” article because I am sure it is a term you will hear quite a bit throughout the next couple of weeks.
A referendum is being held Thursday, June 23/16 to decide whether Britain should leave the European Union, or remain a part of it.
It is obvious that the outcome of the referendum will impact the Forex markets, it is it also important to know that the nature of the impact, and how exactly the markets will behave before and after the referendum is finalized.
Brexit is simply a term coined by the exit of Great Britain (UK) from the European Union (Br-exit) or British exit.
What is Bremain?
Bremain is the side for remaining in the European Union. Being that these two factions’ are primarily concerned with economic issues, the outcome could provide profit or loss. Yet it could just hold stability.
These issues mainly affect the GBP pairs GBP/USD, GBP/JPY, GBP/CAD, EUR/GBP, GBP/AUD, GBP/CHF, and the GBP/NZD. These pairs are already trending strongly, that is their normal behavior for these pairs.
This is also true for the Euro pairs. They have been strong as of late.
Trading Forex During Brexit
Traders want to know what the market will do. Will it go up, or down, or will it just maintain a normalcy?
What will the markets do? I do not know, but I can tell you what some of the speculation to help you decide for yourself.
Forex Markets Before and After June 23 2016
Depending upon Britain choosing to remain in the European Union or leave, there will be strong moves in the Forex markets, but would be stronger if Britain chooses to leave the European Union.
The currency markets are elastic. If the currency price moves too far in one direction, it soon regresses, and is why I talk a lot about “retracement” , and how to NOT give your money away in the Best Forex Strategy.
The accumulation / distribution factors are present to hold strong trends. This gives a high probability that the market may remain stable regardless of the referendum result.
In my opinion, there will be no unprecedented sustainable volatility in the markets. In other words, it could cause it to make a drastic move in either direction, but the indications are there that it will retrace or recover.
GBP pairs usually move strong in June while most other pairs experience low volatility. The Bremain / Brexit issue is simply a catalyst that will spur the usual strong movements of GBP pairs this June.
The market has a tendency to go against popular expectations. Unanticipated events usually cause surprise moves, and anticipated events do not.
The markets will simply do what they always do, that is move, Whether Britain exits the EU, or remains a part of it, it can present good money making opportunities for savvy traders. The stronger the movement, the more money we make.
It is good to open trades based on what the markets are doing, that is the importance of the setting for the Best Forex Strategy Indicators. Not based on what I think the markets will do. Trending moves will develop further, hence following the trend is always good advice.
Best Forex Strategy for trading during Brexit
I would not fear trading during Brexit. Place your trades according to the signs your indicators and analysis is telling you. I would not be afraid to hedge, or set high stop losses, but that’s me.
If it takes a drastic move in either direction, it is liable to retrace, then you can decide if to take profit or cut your losses. Please keep in mind that the bankers are liable to create a “pump and dump”, so don’t let them steal your money.
We also must not forget about he Euro pairs being a part of this decision, which may create a domino effect with other pairs.
If you are a Best Forex Strategy Trader, then just follow the system. If you are not a member, you can get a lifetime membership here for as little as $19.95 here.
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Use risk control methods when trading currencies to prevent adverse moves from having an adverse effect on your capital, yet allowing you to take full advantage of favorable moves. The best advice for novice traders may be to avoid the Forex Market during this event.